In a recent interview with Coindesk, Bill Hughes of Metamask developer Consensys discussed the possibility of the US Securities and Exchange Commission (SEC) filing a lawsuit against the Ethereum Foundation. While Hughes did not specifically claim that the SEC intends to pursue litigation against any party related to Ethereum, he did state that he believes the agency is indeed investigating Ethereum.
“The way they usually go about declaring a token a security, like they cited SOL or ADA in the Coinbase case, is usually to go after a third party and call another token a security in the course of that litigation,” Hughes said.
“There are also cases where they go after the issuer of the so-called security token, like in the Ripple case, but they don't need to do that.”
Hughes noted that as recently as October 2023, the SEC allowed Ethereum-based futures ETFs to be traded on securities exchanges, implying that the asset underlying the futures contract is not a security. However, it appears that something has changed since then, causing the SEC to change its position.
Hughes continued his statements about ETH:
“It's absolutely reasonable that the market is very concerned about this because so many people are investing in this ecosystem. For the SEC to completely change course in this way would obliterate years of untruths about what Ethereum is, at least as perceived by the market, and would be dangerously disruptive to all of this. “So this becomes an issue that needs to be watched closely.”
*This is not investment advice.